Amortization Recast Gap Calculator

Loan recasts re-amortize over remaining term, often reducing monthly payments.

Original loan balance

Interest rate %

Original amortization

Years elapsed

Lump sum principal

Monthly payment reduction

$528

New monthly payment

$1,859

Old monthly payment

$2,387

How the math works

Recalculate current balance via compound interest formula, subtract lump sum, re-amortize over remaining term.

$500k loan → $452k after 5 yrs → $352k after $100k lump → $1,857/mo new vs $2,387 old = $530/mo reduction.

How to Use

Enter original loan balance.
Enter interest rate %.
Enter original amortization years.
Enter years elapsed.
Enter lump-sum principal payment.
Read new payment and gap.

Frequently Asked Questions

What is a loan recast?

A loan recast re-amortizes the remaining balance over the remaining term after a principal prepayment. Unlike refinancing (which requires new loan, new appraisal, new fees), recasting simply applies a one-time lump-sum payment and recalculates the monthly payment based on the new balance. Typical recast fee: $200-500 (vs 2-3% of loan value for refinancing). Rate stays the same; only principal and payment change.

When does a recast make sense?

(1) Borrower comes into windfall (bonus, sale proceeds, inheritance) and wants to reduce monthly obligation without refinancing. (2) Borrower has accumulated principal paydown via extra payments and wants to crystallize into lower monthly. (3) Rate is low and refinancing would lose favorable rate. (4) Simple administrative move without credit re-review. Common in 30-year mortgages (allowed on conventional, not VA/FHA).

Recast vs refinance?

Recast: preserves rate, cheaper, simpler, no credit check. Refinance: can change rate (opportunity if rates dropped), can extract equity (cash-out), can change term (15 to 30 year or vice versa), more expensive, credit check required. If current rate is favorable and you just want lower payment, recast. If you want to extract equity or restructure term, refinance. Jumbo loans sometimes don't allow recast.

What's the payment math?

$500k original loan at 4% 30-year = $2,387/mo. After 5 years, balance ~$452k. Extra $100k prepayment reduces balance to $352k. Recast: $352k at 4% over remaining 25 years = $1,857/mo — $530/mo reduction. But total interest over 25 years also drops from $221k to $205k. Recast rearranges cash flow more than it reduces total interest — that's the tradeoff.